Google Adwords 101: Guide to Pay Per Click (PPC) Advertising

PPC stands for Pay Per Click, a model of advertising where internet marketers pay a fee each time someone clicks on one of their ads.

In a nutshell, it is the opposite of SEO.

Instead of driving visitors to your website organically (through blog articles or social media etc.), you are buying traffic for your website.

Search engine advertising is currently one of the most popular forms of PPC. Many search engines offer PPC advertising. But the king of search engine PPC is undoubtedly Google Adwords.

The rest of this guide focuses on Google Adwords, but the principles are the same for every other type of PPC advertising services such as Bing or Facebook.

Adwords allows advertisers to bid for ad placement in Google’s sponsored links when somebody searches on a keyword that is relevant to their business offering on Google.

For example, if we place a bid on the keyword “wedding cakes,” our ad shows up at the top spot on Google’s results page.

Whenever a user clicks on our ad is, he gets redirected to our website.

When this happens, we pay Google a tiny fee for bringing the user to us.

When PPC is properly set up and targeted, the ROI (returns on investment) is high, because the fee we pay for the traffic converts into sales.

In other words, if we pay £5 for a click, but the click results in a £500 sale, then a 100x profit from our spending.

It’s not difficult to understand PPC. But there is a lot of planning that goes into building a successful PPC campaign: that includes research, choosing the winning keywords, to organising those keywords into structured campaigns and ad groups, to setting up PPC-optimised landing pages.

If done wrongly, PPC becomes a costly expense, which can put a big dent in any small business’ finances.

Google reward advertisers who can create relevant, intelligently targeted pay-per-click campaigns by charging them less for ad clicks.

If your ads and landing pages are relevant and satisfying to Google users, Google actually charges you less for every click, leading to higher profits for your business.

So if you want to dive into PPC to drive sales, it’s crucial to understand how it works.

This is part 1 of our PPC guide series. To learn more about Facebook PPC, use this link.

How do Google Adwords campaigns work?

Google offers advertisers a lot of tools to help them craft highly compelling ads.

For example, with ad extensions, you can provide additional links for the user to click on, as well as more information about your product.

PPC marketing experts are constantly testing and tweaking their ads to find the most persuasive message for each keyword group to maximise clicks and Quality Score.

Once you’ve started with your campaign setup, you’ll need to select campaign goals and pick a campaign type.

Google will then recommend the features and settings to help you meet your advertising objective.

Note that you will have access to all campaign settings and regardless of what goal you choose, and you can always choose a different goal.

Goals include:

  • Leads
  • Brand Awareness & reach
  • Sales
  • Website traffic
  • Product & brand consideration
  • App promotion

The campaign type decides where customers will be able to see your ads, but you make this more specific by targeting your ads.

The campaign types available at your disposal include:

    • Shopping campaign

Video campaign

  • Display Network campaign
  • Universal App campaign
  • Search Network campaign


There have been some changes to campaign types in the new Google Ads experience.

For example, if you’d like to create a Search Network campaign targeting the Display Network (the equivalent of a ‘Search Network with Display Select’ campaign in the previous AdWords experience), you can select ‘Search Network’ as your campaign type, then add the Display Network in your network setting.

Campaign types are focused around Google’s advertising networks: Google Search Network, Google Display Network, and YouTube Network.

These networks consist of all the places where your ads can appear on. This will include all of Google’s sites, websites that show relevant Google ads, and other placements – such as mobile apps.

Basic Terms in Google Adwords


Keywords refer to the terms that you can use to get your ads to show up when somebody runs a search on Google.

Like SEO keywords, you can choose words that such as topics or phrases that relate to some specific matter of significance.

For example, if you are dealing with “Bakery services,” you can use ‘cake decoration’ as a keyword.

In order to have a comprehensive list of keywords that can reach out to all your target audience, you need to do an extensive keyword research.

An effective PPC keyword list should be:

Relevant: You’ll want to be paying for Web traffic that is relevant to your business niche.

You’ll also want to locate targeted keywords that have a higher PPC click-through rate, which leads to a more effective cost per click, and increased profits.

Exhaustive: Your keyword research should ideally include not just the most popular and frequently searched terms in your niche, but also to include the long tail keywords too.

Long-tail keywords are more precise and uncommon, but they add up to account for the majority of search-driven traffic.

Also, long-tail keywords are much less competitive, and therefore cost less to use.

Expansive: PPC is costs can fluctuate over time. Some keywords may become less profitable as time goes on.

Therefore, you’ll want to continually refine and expand your campaigns, and create a pool of keywords that is continuously adapting and keeping up with the times.

Click-Through Rate (CTR)

Getting a high click-through rate is essential to your PPC success because it impacts both your Quality Score and how much you will pay every time someone clicks your search ad.

Click-through rate (CTR) is a metric that measures the number of clicks advertisers receive on their ads per their number of impressions. So it is important to understand how CTR is calculated and the factors that influence CTR.

CTR is calculated using this formula:

(Total Clicks on Ad) / (Total Impressions) = Click Through Rate

You can also look at the CTR within the dashboard of your Google Adwords account.

Click-through rate is vital to your Adwords account because correlates to your Quality Score.

Ad Rank

Google Ad Rank determines how often your ads show up, and at which position. This is determined by the bid and the quality of the ad.

In summary, the formula looks like this:

Ad Rank = Quality Score * Bid

Whenever someone sees your ad and clicks on your it, you will be charged a fee that is based on CPC (cost per click).

With this system, advertisers can reach potential customers at a cost that fits their budget. It’s essentially a kind of auction.

Quality Score

Quality Score is an index that measures how your PPC ads perform and how much you pay for each click.

It works like a credit score. A good credit score ensures that you can easily get a loan approval, while a bad credit score means you get slapped with extra fees.

Needless to say, your Quality Score has a huge impact on how much you need to spend on your PPC campaigns.

Your Quality Score is dependent on several factors, and that includes:

  • Your click-through rate (CTR)
  • Your historical AdWords account performance
  • The relevance of each keyword to its ad group
  • The relevance of your ad text
  • Landing page quality and relevance

The exact method of calculating your Quality Score is a mystery. Nobody outside of Google knows what the algorithm is.

But we do know for a fact that CTR is the most critical factor. When Google users click on your ad, it is a clear indication that your ad is relevant and helpful to them.

To reward advertiser for useful and relevant advertising content, Google AdWords offers pricing discounts for ads that offer high relevance.

That means the higher your Quality Score, the lower your cost per click (CPC), the higher your ROI.

Ad Groups

An Ad Group is simply the grouping for your keywords in your search marketing campaigns.

In Adwords, after you’ve created an account, you set up a new campaign, which is home to Ad Groups.

Each ad group then contains several thematic keyword variations. For example, the “Oval Bedside Tables” ad group may contain these keywords:

  • Bedside tables oval
  • Oval Bedside tables
  • Oval Bedside tables on sale

When using an Ad Group, you want to ensure that you’re offering:

    • Integration — Build a system where you’re constantly creating keyword groups, ad text, and landing pages that are closely connected with one another.
    • Consistency — Your ad text and landing pages should speak directly and not deviate in your message to the searches users are typing in to reach your site.

Doing so can lead to 2 positive effects, such as:

Lower Costs — Creating well-aligned Ad Groups brings up your Quality Score, which means that you’ll be paying less fees for the same number of clicks.

More Conversions — If a user searches for “car repair services” and your advertisement talks about your car repair services, and then you send me to a page about those same car repair services, he is much more likely to convert than if your ad text or landing page has nothing to do with one another or aren’t well integrated with your keywords.

Text Ads

Once your ad groups are set up, and the keywords are chosen, you can start writing copy for your ads.

Text ads are the easiest and arguably the most effective ad among Adwords ads. If you are a beginner to Adwords, you should dip your toes in Text ads before you experiment with other ad formats.

Your Text Ad should include the targeted keyword theme, any value propositions, and a call to action.

Creating well-written AdWords ads gets you several benefits such as:

      • Improved Click-Through Rate
      • Better Quality Scores
      • Lower CPA (Cost Per Action)

How to write successful Adwords text ads?

Highlight your unique selling point –

        • What is the USP of your product or service? Is it the ease-of-use? The zero down payment? Use that as an angle for your ad and tell the world. Use this opportunity to show your products, services or offers that make you competitive.

Include prices, promotions, and exclusives – When people search on Google, usually it’s to help themselves make a decision about something. Provide them a deciding factor, such as a sale promotion or a discount.

Empower customers to take action – CTAs such as buy now, call today, order, browse, sign up or get a quote are examples of good Adwords CTAs. Use a strong CTA to tell users what to do, and what they are getting when they click on your ad.

Include at least one of your keywords – Keywords in your ad text show your ad’s relevance to what users want. For example, if you’ve included smart refrigerators as a keyword, your ad headline could be “Buy Smart Fridge.” Use keywords to let users easily identify the purpose of your ad.

Match your ad to your landing page – Check that the webpage that you’re linking to from your ad (the landing page) works, and make sure that the promotions or products in your ad are there and featured promptly. When people can’t find what they want, they tend to leave your website, and that hurts your CTR and your Quality Rank.

Don’t forget your mobile customers on mobile –When people run Google searches on their mobile phones, chances are they may require your product or service urgently. You should capitalise on this urgency. Use location and call extensions to show your location and phone number.

Also, create ads that are targeted for mobile devices, such as by creating mobile-specific ads and offering specials discounts for mobile users.

Try and Experiment – The best practice is to create 3 or more ads for each ad group, and use a different message for each to test out which one yields the best results. Google will rotate the ads automatically to show the best-performing ads more often. Keep the winner, and tweak the losers to see if you can get better results.

Check for common ad text mistakes – Nothing shows poor quality about you or your business than spelling mistakes on your ad. That includes no extra spaces, sTrAnGe CAPITALISATION or unclear URLs. Check your ad before running them to make sure you catch any mistakes.


This guide should give you a great start in Google Adwords.

The Google Adwords has a lot of advanced features and functionality that you probably won’t use, so don’t be overwhelmed by the options.

Also, every account and business is different, so you should experiment and test different strategies that work best for you.

Be sure to continually optimise your account using the information above, this routine maintenance will help you boost sales and decrease your costs.

Keep testing new strategies and employing what you learned through this guide and you will be an AdWords expert in no time.

About Murray Dare

Murray Dare is a Marketing Consultant, Strategist and Director at Dare Media. Murray helps UK businesses find better ways to connect with their audiences through targeted content marketing strategies.